EXHIBIT 12 STATEMENT RE: COMPUTATION OF RATIOS TOLL BROTHERS, INC. AND SUBSIDIARIES RATIO OF EARNINGS TO FIXED CHARGES (Amounts in thousands, except ratios) Year Ended October 31, Nine Months ------------------------------------------------------------ Ended 1994 1995 1996 1997 1998 July 31, 1999 ------- -------- -------- -------- -------- ------------- Earnings: Income before income taxes and extraordinary loss and change in accounting ....................... $56,840 $ 79,739 $ 85,793 $107,646 $134,293 $109,831 Homebuilding: Interest expense: .................................... 20,136 22,473 24,646 29,746 36,052 28,159 Rent expense ......................................... 71 93 151 193 293 280 Amortization ......................................... 785 801 705 667 610 457 Collateralized mortgage financing: Interest expense ..................................... 624 376 300 233 184 82 Amortization ......................................... 157 29 -- -- -- -- ------- -------- -------- -------- -------- -------- $78,613 $103,511 $111,595 $138,485 $171,432 $138,809 ======= ======== ======== ======== ======== ======== Fixed charges: Homebuilding: Interest incurred: ................................... $21,701 $ 25,780 $ 27,695 $ 35,242 $ 38,331 $ 37,390 Rent expense ......................................... 71 93 151 193 293 280 Amortization ........................................... 785 801 705 667 610 457 Collateralized mortgage financing: Interest incurred .................................... 624 376 300 233 184 82 Amortization ......................................... 157 29 -- -- -- -- ------- -------- -------- -------- -------- -------- $23,338 $ 27,079 $ 28,851 $ 36,335 $ 39,418 $ 38,209 ======= ======== ======== ======== ======== ======== Ratio, including collateralized mortgage financing(1)... 3.37 3.82 3.87 3.81 4.35 3.63 ======= ======== ======== ======== ======== ======== - ---------- (1) For purposes of computing the ratio of earnings to fixed charges, earnings consist of income before income taxes, extraordinary loss and change in accounting plus interest expense and fixed charges except interest incurred. Fixed charges consist of interest incurred (whether expensed or capitalized), the portion of rent expense that is representative of the interest factor, and amortization of debt discount and issuance costs.